Search form

Search

MNCs in the News-2018-08-03

China

Shanghai has released more than 100 policies for the purpose of opening up to attract greater foreign direct investment (FDI) in, among other things, “the advanced manufacturing of automobiles, aircrafts, and ships.” Those lured by/benefitting from the new environment included United States (US) new energy vehicle company Tesla and US Caterpillar Inc., the latter engaged in “remanufacturing” which entails manufacturing employing “reused, repaired, and new parts.” Caterpillar specifically is benefitting from policies designed to facilitate the importation of advanced equipment and a sustainable economy (Zhang Kun, “Policies to Attract Greater Volume of Foreign Capital,” China Daily, August 4, 2018, http://usa.chinadaily.com.cn/a/201808/04/WS5b647d5ca3100d951b8c88c8.html)

Reportedly, Google plans to launch a censored version of its search engine in China to satisfy Chinese government limits on access to websites dealing with sensitive topics like human rights and religion. Google allegedly may launch its site within the next 6-8 months. An official with the Cyberspace Administration of China said “he was not aware of the Google initiative.” Google left China around 8 years ago because of inter alia an unwillingness to censor search results (Zen Soo, “Google Reported to Launch Censored Search Engine in China, Marking Shift in Strategy,” South China Morning Post, August 3, 2018, https://www.scmp.com/tech/china-tech/article/2157850/google-reported-lau...)

In an apparently loosening of the policy environment that witnessed a clamp down on overseas borrowings last year, China’s National Development and Reform Commission (NDRC) has allowed a much larger number of companies, including real estate developers, to raise debt from overseas markets. This enhances their financing options, but overseas debts do have interest rate and currency risks that need to be managed. Prior to the loosening, there was some fear that China would ban offshore debt issuances by real estate companies (Wang Yanfei, “Regulator Permits 40 Firms to Raise Debt in Overseas Markets,” China Daily, August 3, 2018, http://www.chinadaily.com.cn/a/201808/03/WS5b63a774a3100d951b8c85a9.html)

Yantai Taihai Group, a Chinese appliance and machinery manufacturer, dropped a plan to buy a stake in Germany’s Leifeld Metal Spinning AG due to German government opposition. Reportedly, the German federal government had decided to block the deal for security reasons and it was unlikely Chancellor Angela Merkel would overturn the decision. The Leifield deal seems to be the first one that reflects a new German FDI review regime established in July 2017. German anxieties about Chinese FDI in Germany escalated after 2016 (Ke Dawei, “Chinese Tech Takeover Abandoned in the Face of Berlin Veto” Caixin, August 2, 2018, https://www.caixinglobal.com/2018-08-02/chinese-tech-takeover-abandoned-...)

Japan

Japan, the US, and Australia have agreed to invest in infrastructure projects in the Indo-Pacific, in a move seen as a counter to China’s rising regional influence. The agreement will mobilize investment in energy, transportation, tourism and technology infrastructure. However, Japanese Chief Cabinet Secretary Yoshihide Suga emphasized that the agreement is not a counter to China’s Belt and Road Initiative (BRI) and instead is aimed at helping improve peace and prosperity in the region. Funding sources for the projects remain unclear (“Japan, U.S. and Australia plan infrastructure push to counter China in Indo-Pacific,” The Japan Times, July 31, 2018, https://www.japantimes.co.jp/news/2018/07/31/national/politics-diplomacy...)

Japan seeks to cooperate with Moscow on the construction of a liquefied natural gas transfer hub in Russia’s Far East. In addition to reducing the cost of transportation from Siberian production sites, Tokyo also seeks to diversify its energy supply sources to guard against political risks. Among other Japanese companies, trading house Marubeni and shipbuilder Mitsui O.S.K. Lines are strongly considering participation in Russian gas producer Novatek’s LNG terminal construction project. Tokyo may provide aid for the project through public financial institutions. (Takashi Tsuji, “Japan and Russia plan LNG hub in Far East,” Nikkei Asian Review, July 31, 2018, https://asia.nikkei.com/Economy/Japan-and-Russia-plan-LNG-hub-in-Far-East)

South Korea

The Korean government will invest USD $1.3 trillion in a 10-year next-generation semiconductor project to attract global semiconductor firms to set up plants in Korea. In order to maintain Korea’s competitiveness in the industry and become the “hub of global semiconductor manufacturing,” the government will target production lines of US’ Air Products, the Netherlands’ ASML and Japan’s TEL. The government plans to attract these companies by expanding support for foreign investment by providing subsidies and tax benefits while improving location and environmental regulations (“Gov’t all out to keep Korea’s top spot in chips,” The Korea Times, July 30, 2018, http://www.koreatimes.co.kr/www/tech/2018/08/133_253042.html)

South Korea is bolstering its efforts to win a bid for a Saudi Arabia nuclear project after losing the bid for a construction project in the United Kingdom. State-run Korea Electric Power Corp. (Kepco) was shortlisted along with the US, France, China and Russia to bid for Saudi Arabia’s new 2.8-gigawatt nuclear power plant. If Kepco wins this bid, it will be a breakthrough for the Korean nuclear industry operating under President Moon Jae-in’s “anti-nuclear” government (Shin Ji-hye, “Korea ramps up efforts to win Saudi Arabia nuclear project,” The Korea Herald, August 2, 2018, http://www.koreaherald.com/view.php?ud=20180802000628)

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.